In a bid to promote market competition and safeguard consumer interest, a new set of corporate merger & acquisitions norms are being finalised by the Competition Commission of India (CCI). The CCI will take a final decision on the various proposals in its meeting scheduled on April 29.

However, the new framework for corporate mergers & acquisitions will not affect any corporate M&A in the public domain or the deals that are ‘completed’ by June 1, when the new M&A norms come into effect. According to CCI officials, all M&A deals, in which effective steps have been taken by the concerned corporate houses before June 1, will be treated as ‘complete’. Consequently, these will not be subject to scrutiny as per the new norms and the Competition Act.

In a meeting, held by the IMC on April 25 for considering the commission’s ‘discussion paper on Regulation of Combinations,’ CCI chairman Mr Dharendra Kumar addressed representatives of CII, FICCI, Assocham and Indian Merchants’ Chamber and Law Firms to further clarify its stand on the upcoming norms. “We will hold many more rounds of discussions with corporate leaders, also in other cities, for eliciting their views before arriving at a decision,” he said.

Union minister of corporate affairs Murli Deora, who had chaired the meeting, had also ascertained that his ministry would consult the union finance ministry, RBI and SEBI before finalising the notification and laying down the new rules for M&A by corporates.

But noted business leaders like Rahul Bajaj, Deepak Parekh and Adi Godrej voiced their concern and said that the ‘discussion paper’ might introduce unwarranted curbs in respect of stock-in-trade, bonus shares, stock splits and so on, which had little to do with corporate M&A.

Kumar, however, pointed out that M&A in India is evolving fast and happens to be an integral part of corporate competition and economic growth. In fact, there are 120 countries which have enacted a ‘competition’ law, but only eight of these countries have provided for voluntary filing, and all other countries have a mandatory filing system. Most countries don’t favour voluntary filing because it may lead to uncertainty. “Even in jurisdictions having voluntary filing, the authorities are now moving towards the mandatory filing system,” he added.

MCA secretary D.K. Mittal also observed that with India Inc. going global, it is now high time that the government should come up with a wholesome framework for corporate mergers & acquisitions.